Well, I suppose it's about distribution and power levels. I mean currently my whole house is lit by LED, just in traditional sockets. But they aren't expensive. And LEDs are more power efficient at lower power than their max. So having 10'000 leds that are rated for 0.5 watt each, running at 10% of that, wouldn't be that expensive to run. About 500 watts plus the inefficiency of the system as a whole. But would be a similar or greater total amount of light as my current bulbs.

The initial upfront cost will certainly be the main cost issue. And yeah, acrylic panels is what I was thinking for diffusing. I don't need it to feel like a wall, but I would need to know if drywall has some immutable property I would need to replicate, or at least make sure is still something that acrylic would take care of.

Edit: it looks like drywall is primarily used due to it's flame resistance. So I would probably want to keep it. Acrylic is technically tough to ignite, but once it does ignite, it burns vigorously. So that is probably the main problem. Even keeping drywall behind it, acrylic covering every wall could be a very bad idea in the case of a fire hot enough to get it started.

Edit 2: Frosted tempered glass would be fine in that regard, but significantly more expensive. Ah wells, my VR house will have to have it instead. Much cheaper to do in VR, lol.